On the agenda of two-day marathon meeting are discussion topics such as the state of diamond manufacturing in the New Normal diamond supply pipeline; the disappearance of the manufacturers’ profit margins; IDMA’s and its members’ relationship with the major producers; the changes in the distribution methods and channels; and the demise of secondary market. The meeting is attended by IDMA members from Belgium, Botswana, China, Germany, India, Israel, the Netherlands, Russia, South Africa and the USA.
Below follows the text of the opening statement:
The IDMA Presidents’ Meeting takes place at a time that the market continues to experience difficult and complex problems. There is a real crisis in our industry. Speculative rough dealing is spinning out of control, rough prices keep increasing and the fall in polished prices has brought the manufacturers to their knees. Our appeals for a reality check to the rough producing companies, to the rough diamond marketing organisations in various countries and to the banks that are financing our business, have not yielded any results.
Mining companies are busy with their own current issues, be it the move to Botswana or privatization, and are trying to address their own local business targets. They are not looking to analyse what is happening in the global market and are not doing anything to correct it.
They seem to be forgetting that it is the manufacturers who are the most valuable resource in moving the goods to the market and if manufacturers cannot buy and polish at a profit, it is not a sign of a healthy industry. The wheelers and dealers have yet again been shown up for their inability to make a contribution to creating a healthy market, yet the mining companies continue to rely on them.
Last July a mining executive said in Antwerp they understand the problem, even better than we do. However, as many senior executives are now resigning from some of the diamond producing companies, we must hope that those who will replace them will appreciate the pressing needs of the industry. Regrettably, we now see many people in key positions at rough diamond producers who have no experience in our industry. They may be good marketing professionals and financial experts, yet they do not understand that diamonds are a unique product.
Yes, diamonds are goods, a product for the consumer but a product devoid of consumer and investment features. To ensure that the industry continues to be sustainable, the producers must not only be governed by short term targets, relying on market speculators to fuel their profits but they must essentially wake up and re-assess what is in their long term interest. It is time they realize that their supply strategies must take into account the genuine demand and need in the market.
We appeal again to the management of the producing companies and to shareholders. You are losing the most valuable people in the market – us, your soldiers. Do you think the generals will be able to fight the battle for diamonds without these soldiers?
To conclude, we would like to remind all of Cecil Rhodes’ insightful saying: “Should there be only four people in the world, we should be producing diamonds for only two of them.”
